Ethereum Needs To Undergo Three Transitions To Succeed, Says Founder
Key Takeaways:
Ethereum founder Vitalik Buterin shared a blog post that noted the next steps for Ethereum’s success.
Meanwhile, ETH prices slumped with the wider market.
PATNA (CoinChapter.com) — Ethereum founder Vitalik Buterin shared a three-step transition process that he believes the blockchain network needs to undergo to expand its adoption and growth.
In a blog post titled “The Three Transitions,” Butering underscored the importance of major technical transitions that Ethereum needs to integrate “roughly simultaneously.”
The transitions revolve around Layer-2 scaling solutions for the Ethereum network, smart contract wallets, and the inclusion of privacy in fund transfers. Buterin stated that without scaling solutions, the transaction costs would end up burying the Ethereum network.
Moreover, the Ethereum founder noted that the lack of wallet security would likely drive users away from the blockchain network. Lastly, the lack of transaction privacy might be a deal breaker for several users, driving prospective users towards centralized solutions instead of Ethereum.
Additionally, Buterin acknowledged that for the transitions to work, a lot of “secondary infrastructure” will require updates. Buterin cited the example of the Ethereum Name Service (ENS), stating that the Web 3 domain name provider had taken steps to move to L2 via the ERC-3668 (the CCIP standard).
The ENS CCIP effort is a success story, and it should be viewed as a sign that radical reforms of the kind that we need are actually possible
Vitalik Buterin stated.
Wallet Interoperability And Transaction Privacy Vital For Ethereum
Scaling the Ethereum network to operate on Layer-2 blockchains would help control the gas fees on the network. In another example, Buterin highlighted the need for interoperability between different wallets and networks for a smooth payment system.
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The Ethereum founder stated that a key problem with establishing a payments system with Ethereum and L2 solutions was interoperability amongst different L2 solutions. Buterin noted that a simple payment would “require a lot more information than just a 20-byte address.”
“Wallets will need to be updated to make sure that they do not send only 21000 gas along with a transaction, and it will be even more important to ensure that the payment receiving side of a wallet tracks not only ETH transfers from EOAs, but also ETH sent by smart contract code.”
Buterin stated in the blog post.
A seamless integration of L2 solutions in a payment system would likely help encourage using cryptocurrencies in everyday transactions.
However, moving towards interoperability without considering wallet security would be unwise. The absence of privacy might become a major deterrent in expanding the platform’s user base. However, complete obscurity could attract malicious elements to the market.
Buterin proposed using stealth transactions (each transaction is assigned a separate address) as a potential solution to the privacy/transparency conundrum.
ETH Price Drops With The Wider Market
Meanwhile, ETH price dropped nearly 7% on June 10 to form a daily low near $1,720 before bulls pared some of the losses. ETH bulls aggressively defended the 200-day EMA (green wave) dynamic support. However, bearish pressure from the wider market kept the Ethereum token price in the red.
FUD in the market following the delisting of ADA, SOL, and MATIC by Robinhood likely spread to ETH price, forcing Ether price to levels last seen in March 2023. If bears breach the 200-day EMA support, ETH price could drop to support near $1,700.
Breaching the immediate support level might result in ETH price falling to test support near $1,620, erasing nearly all of the Ethereum price’s gains since March 2023.
Conversely, buyers could view the dip as a buying opportunity since ETH is not directly affected by the SEC lawsuits or the Robinhood delisting. Therefore, ETH price might rise to its 100-day EMA (blue wave) resistance near $1,800.
Breaking and consolidating above the immediate resistance might help the Ethereum token price target the resistance near $1,890 before retreating.
The RSI for ETH remained neutral, clocking at 38.66 on the daily charts.
The post Ethereum Needs To Undergo Three Transitions To Succeed, Says Founder appeared first on CoinChapter.
Filed under: Bitcoin - @ June 10, 2023 10:49 pm